CCA 201041044: IRC § 3402(d) may abate withholding in an erroneous FICA and SECA treatment

Plain-English summary

The Chief Counsel’s advice addresses an erroneous treatment involving income tax withholding, FICA tax, and SECA tax. It states that IRC § 3402(d) may permit abatement of the income tax withholding, and that IRC § 6521 may allow correction and a credit or refund of excess SECA tax when the employee’s Form 1040 limitations period has expired.

Ruling snapshot

• Question: Which provisions may correct erroneous withholding and excess SECA tax when FICA tax is paid?
• Outcome: Advice given
• Key authorities: IRC §§ 3402(d), 6521; IRC § 6110(k)(3)

Full text (IRS public release)

ID: CCA_2010092908390970 Number: 201041044
Release Date: 10/15/2010
Office: -----------------------------
UILC: 3402.00-00, 6521.01-00

From: ----------------------
Sent: Wednesday, September 29, 2010 8:39:16 AM
To: ------------------
Cc:
Subject: 3402(d) abatement

The abatement provision of IRC § 3402(d) may apply, but only with respect to the income tax withholding. If the taxpayer pays the FICA tax, the employee may be entitled to a refund of the portion of the SECA tax he paid that exceeds his share of the FICA tax. If the statute of limitations period has expired for the employee’s Form 1040, the mitigation provision of IRC § 6521 may still permit the employee to correct the erroneous treatment and get a credit or refund of the SECA tax to the extent it exceeds his share of the FICA tax.

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